August 26, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Copenhagen, Denmark-based Novo Nordisk and the governor of North Carolina, Pat McCrory, announced today that the company will spend between $1.2 and $1.7 billion to build a new manufacturing facility in Johnston County, N.C.
The new manufacturing plant is expected to create approximately 700 jobs over the next five years. It will manufacture active pharmaceutical ingredients (API) for diabetes treatment products. The company currently employs more than 700 at an insulin manufacturing plant in Clayton, N.C.
The state is supplying a Job Development Investment Grant (JDIG) totaling $15.9 million. Up to $1 million in performance-based grants from One North Carolina Fund have also been offered, which need to be matched by local governments. The jobs created are expected to average $68,420 annually, currently double the average wage in the county.
Under the JDIG, Novo Nordisk could receive up to twelve annual reimbursements that are equal to 75 percent of North Carolina’s personal income tax withholdings from the new jobs. That is based on state-certified proof the company has created the jobs it has agreed to. Over a 12-year period, those reimbursements could total $15.8 million to Novo Nordisk.
This is particularly good news since the state and the area’s other biopharma companies have been cutting jobs. GlaxoSmithKline announced in March of this year that it was laying off about 180 people in North Carolina. In December 2014, it indicated it was cutting about 900 positions in research and development in the Research Triangle Park, N.C. area. Alternately, GSK announced earlier this month that it was hiring 100 people at a facility in Zebulon, N.C.
In May of this year, Hospira, Inc. announced it was laying off 100 people at its Clayton, N.C. facility. And in April, Canadian firm Valeant Pharmaceuticals International, Inc. acquired Raleigh, N.C.’s Salix Pharmaceuticals, Ltd. , laying off 258 workers.
“For some time, we have been evaluating several options to bring more capacity into the United States because of this great need for diabetes medicines,” said Jesper Høiland, president of Novo Nordisk Inc. USA and executive vice president of Novo Nordisk A/S to Triangle Business Journal. “After a thorough evaluation of multiple sites and an extensive vetting process, Clayton ended up being our preferred location. We already have a large and very professional organization here, and have been impressed by the excellent collaboration we have had with this city, county and state leadership, and appreciate the incentives they have secured in connection with this investment.”
“This billion-dollar decision by Novo Nordisk more than doubles the size of its North Carolina workforce and underscores the Research Triangle’s global leadership in bio-manufacturing,” said Governor McCrory in a statement. “When it comes to life sciences and manufacturing, North Carolina can compete — and win — against any location in the world.”
